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Survey Reports EU Installers Support Extension of Import Duties on Chinese-origin Solar Panels

In the course of August 2016, EU ProSun, a SolarWorld-backed organisation of EU solar businesses, is reported to have performed a survey of more than 500 solar installer companies from all 28 EU Member States. The survey measured the installers’ opinions about the possible extension of anti-dumping and anti-subsidy duties on Chinese producers of solar panels.

EU ProSun’s action comes at a time when the European Commission is undertaking an expiry review of the trade defence measures which have been in place since December 2013 against Chinese-origin solar panels and cells. The definitive anti-dumping and anti-subsidy duties were imposed at that time for a period of two years. The ongoing review investigations were initiated on 5 December 2015 during which time the original measures continue to remain in force.

Earlier this summer, 34 solar and renewable energy associations headed by the SolarPower Europe solar trade association wrote a letter to the European Commissioner for Trade, Cecilia Malmström, calling upon her to end the trade barriers. The signatories claimed to represent a total of 1.3 million jobs in 20 different EU countries. In their arguments, the associations held that the duties were making renewable energy prices higher, affecting the entire value chain and making solar power less competitive.

The measures are also felt to be contrary to the goal of the EU to combat climate change and reduce carbon emissions. SolarPower CEO James Watson was quoted as saying that “98% of the European industry supports our position” (see: European Trade Groups Call for End to Duties on Solar Panels).

The survey by EU ProSun appears to be a reaction to this initial letter. The first complaint against the Chinese solar firms was also brought by this organisation representing European solar manufacturers. The organisation is desirous of clarifying whether the claim made by these associations was valid and to see if European solar installers also prefer to see these trade defence measures terminated. In response to James Watson’s earlier statement, EU ProSun president and vice-president of SolarWorld, Milan Nitzschke, said that the associations which wrote the letter represented the big importers, but not the installers of solar panels. According to the survey, a clear majority of them actually support an extension of the duties and the minimum import price (MIP) as long as the Chinese exporting companies remain a threat to the European industry under the EU anti-dumping and anti-subsidy rules.

Despite a slowdown in the EU solar market, the trade defence duties and MIP have not had a negative effect on European businesses, and provide them with protection against unfair competition, according to Nitzschke.

When asked for the reason for the European market decline in solar power, respondents in the survey came up with two main causes. On the one hand, respondents pointed to the reduction of solar feed-in tariffs (FIT). FIT provides payments to owners of electricity-generating renewable energy and has been a major incentive for consumers. The generous initial rates resulted in an uptake of solar panels, which was larger than expected. Governments have since decided to make cuts in the FIT to control costs.

The other cause which respondents indicated is the taxation of self-consumed solar power. Such a measure is imposed on consumers for the electricity they generate and consume in their premises via their own PV systems on top of the basic electricity fee which all consumers pay.  

According to the installers surveyed, the imposed duties actually enable European companies to compete with Chinese imports, which – they argue – benefit from lower-cost regulatory requirements and government subsidies. Almost 90% of respondents believed that it is important to keep a European product presence on the market.

In the event of an extension of the current measures for a further period, including the continued imposition of the MIP, less than 4% of European businesses surveyed expect that cuts would have to be made within their businesses in the future. Fewer than a quarter considered that further adjustments would have to be made to their companies’ structures. Almost two-thirds of the installers surveyed are said to have already adapted to the current market conditions and do not foresee any interference in their businesses by Chinese competitors if the Commission decides to be in favour of a continued imposition of trade defence measures.

The Commission is expected to make a recommendation on whether to continue the measures, subject to Member State approval, in early 2017. Should the Commission find that revoking the measures could lead to a continuation or recurrence of injury and dumping/subsidisation, the trade defence measures can be extended for a new period of up to five years.

Content provided by Picture: HKTDC Research
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